CONSHOHOCKEN, Pa.-June 17, 2005- LAWFUEL – The Law News Network -Goldman Scarlato & Karon, P.C., a law firm with offices in Pennsylvania and Ohio, announces that a lawsuit has been filed in the United States District Court for the District of Minnesota, on behalf of persons who purchased or otherwise acquired publicly traded securities of PEMSTAR, Inc. (“PEMSTAR” or the “Company”) between January 29, 2003 and January 24, 2005, inclusive, (the “Class Period”).
The lawsuit was filed against PEMSTAR, Allen Berning, Roy Bauer and Gregory Lea (“Defendants”).
If you are a member of this class and wish to view a copy of a complaint and join this class action, please e-mail us at [email protected] and request a copy of the complaint and a plaintiff certification. If you are a member of the Class, you may move the Court no later than August 15, 2005 to serve as a lead plaintiff for the Class. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. However, if you choose to remain an absent class member, unless and until a class is certified, you are not represented by counsel.
The complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that Defendants issued a series of false and misleading financial statements to the investing public regarding the Company’s financial position. More specifically, the complaint alleges that during the Class Period, PEMSTAR was suffering from liquidity constraints that prohibited it from achieving gross margin expansion, a prerequisite to generating accounting profits. In addition, the Company failed to disclose that it needed to attain approximately a 9% gross margin in order to reach profitability, a level which would be unattainable in a reasonable period of time.
Additionally, the complaint alleges Defendants misrepresented the Company’s financial condition through the understatement of the Company’s liabilities associated with its Mexican facilities and overstating its accounts receivables that were in fact impaired.
On January 24, 2005, PEMSTAR issued a press release announcing that it was revising its outlook for the third quarter of fiscal 2005 and that the Company had implemented a cost-reduction initiative. In addition, it announced that it was restating its financial results for the fiscal year ended March 31, 2004 due to accounting issues at it Mexican facility. Shares reacted negatively to the news, falling to a level roughly 70% below the Company’s Class Period high.
If you bought PEMSTAR securities between January 29, 2003 and January 24, 2005, inclusive, and would like to obtain information about the lawsuit, then you are invited to call (888) 753-2796 to speak with an advisor.
Brian D. Penny, Esq., 888-753-2796